Cell signaling mediated by the Hedgehog (Hh) family of secreted proteins plays crucial roles in animal development and human diseases. The Hh pathway is operating in a similar way among organisms ranging from insects to human. Drosophila has been a powerful model organism to study Hh signaling mechanisms, as sophisticated genetic, molecular, and biochemical tools are available to dissect this important pathway in whole organisms as well as in cultured cells. The long-term goal of my laboratory is to delineate the complex regulatory network that governs Hh signal transduction in order to understand how graded Hh signal is transduced to generate multiple developmental outputs. Hh exerts its biological influence through a conserved signaling cascade that culminates in controlling the balance between the activator and repressor forms of the transcription factor Ci/Gli (CiA/GliA and CiR/GliR). The goal of this research is to investigate the multifaceted regulatory mechanisms that control Ci activity. Our recent study has uncovered a dual role of the Ser/Thr kinase Fused (Fu) in the regulation of both the production of CiR and the activity of CIA, and revealed that Fu is activated through dimerization-mediated phosphorylation of its activation loop. These findings provide a critical inroad into a mechanistic dissection of Ci activation. We will explore the mechanism by which Fu promotes the maturation of Ci into CiA and investigate how the Hh gradient is translated into a Ci activity gradient (Aim 1). In a genetic modifier screen, we have discovered that the SUMO pathway can modulate Hh signaling activity and identified Ci as a SUMO substrate. We will further characterize this new post-translational modification of Ci to explore its role and mechanism of action in Hh signaling (Aim 2). The molecular mechanism by which Sufu inhibits Ci is still poorly understood. We have uncovered a previously unidentified nuclear localization signal (NLS) that overlaps with the Sufu binding domain in Ci. We will further study the function of this NLS and its regulation (Aim 3). Finally, how Ci functions in the nucleus to control Hh target gene expression has not been fully explored. We have identified multiple domains required for CiR-mediated repression. Identifying cofactors that interact with these domains and investigating their roles in Hh signaling should shed important lights into how Ci regulates its target gene expression. Therefore, we will carry out protein- protein interaction screen and in vivo RNAi screen to identify Ci co-repressors (Aim 4). The proposed study should provide a much deeper understanding of the Hh signal transduction mechanism and shed new light into how graded Hh signals are translated into different developmental outcomes.